**UNITEDSTATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

 

**FORM 10-Q**

** **

**x****QUARTERLY REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thequarterly period ended June 30, 2008**

 

**OR**

 

**o****TRANSITION REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**for thetransition period from        to         **

 

**CommissionFile Number 001-15253**

 

****

 

**Janus Capital Group Inc.**

(Exact name of registrant asspecified in its charter)

 

| **Delaware**                              | ** ** | **43-1804048**       |
|-------------------------------------------|------------|----------------------|
| (State or  other jurisdiction of          |       | (I.R.S.  Employer    |
| incorporation  or organization)           |       | Identification  No.) |
|                                      |       |                 |
| **151  Detroit Street, Denver, Colorado** | ** ** | **80206**            |
| (Address of  principal executive offices) |       | (Zip Code)           |

 

**(303) 333-3863**

(Registrant’s telephone number, includingarea code)

 

**Not applicable**

(Former name, former address and formerfiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the Company was required to file such reports), and (2) has beensubject to the filing requirements for at least the past 90 days.

Yes x               No o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company.  See the definitions of “large acceleratedfiler,” “accelerated filer,” “non-accelerated filer” and “smaller reporting company”in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x            AcceleratedFiler o             Non-Accelerated Filer o            SmallerReporting Company o

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).

Yes o               No x

 

As of July 21, 2008,there were 159,811,039, shares of the Company’s common stock, $.01 par valueper share, issued and outstanding.

 

 

 

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**PART I - FINANCIAL INFORMATION**

**Item 1.  FinancialStatements**

 

**JANUS CAPITAL GROUP INC.**

** **

**CONSOLIDATED BALANCE SHEETS (UNAUDITED)**

**(Dollars in Millions)**

 
| ** **                                                                               | ** ** | **June 30,**   | ** ** | **December  31,** | ** ** |
|------------------------------------------------------------------------------------------|------------|----------------|------------|-------------------|------------|
| ** **                                                                               | ** ** | **2008**       | ** ** | **2007**          | ** ** |
| **ASSETS**                                                                               |       |           |       |              |       |
|                                                                                     |       |           |       |              |       |
| **Current assets:**                                                                      | ** ** | ** **     | ** ** | ** **        | ** ** |
| Cash and cash equivalents                                                                |       | $ 275.7   |       | $ 480.7      |       |
| Marketable securities                                                                    |       | 201.1          |       | 210.7             |       |
| Accounts receivable                                                                      |       | 146.3          |       | 164.5             |       |
| Income taxes receivable                                                                  |       | 20.4           |       | 5.9               |       |
| Other current assets                                                                     |       | 58.4           |       | 62.3              |       |
| Assets related to discontinued operations                                                |       | 12.4           |       | 29.8              |       |
| Total current assets                                                                     |       | 714.3          |       | 953.9             |       |
|                                                                                     |       |           |       |              |       |
| Other assets                                                                             |       | 118.3          |       | 112.2             |       |
| Property and equipment, net                                                              |       | 48.4           |       | 46.5              |       |
| Intangibles, net                                                                         |       | 1,327.9        |       | 1,310.4           |       |
| Goodwill                                                                                 |       | 1,183.7        |       | 1,141.1           |       |
|                                                                                     |       |           |       |              |       |
| Total assets                                                                             |       | $ 3,392.6 |       | $ 3,564.1    |       |
|                                                                                     |       |           |       |              |       |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                            | ** ** | ** **     | ** ** | ** **        | ** ** |
|                                                                                     |       |           |       |              |       |
| **Current liabilities:**                                                                 | ** ** | ** **     | ** ** | ** **        | ** ** |
| Accounts payable                                                                         |       | $ 3.4     |       | $ 2.2        |       |
| Accrued compensation and benefits                                                        |       | 83.1           |       | 134.5             |       |
| Current portion of long-term debt                                                        |       | 22.0           |       | —            |       |
| Other accrued liabilities                                                                |       | 55.7           |       | 79.2              |       |
| Liabilities related to discontinued  operations                                          |       | 8.8            |       | 10.8              |       |
| Total current liabilities                                                                |       | 173.0          |       | 226.7             |       |
|                                                                                     |       |           |       |              |       |
| **Other liabilities:**                                                                   | ** ** | ** **     | ** ** | ** **        | ** ** |
| Long-term debt                                                                           |       | 1,105.8        |       | 1,127.7           |       |
| Deferred income taxes                                                                    |       | 401.8          |       | 404.3             |       |
| Other liabilities                                                                        |       | 63.7           |       | 65.7              |       |
| Total liabilities                                                                        |       | 1,744.3        |       | 1,824.4           |       |
|                                                                                     |       |           |       |              |       |
| Commitments and contingencies                                                            |       |           |       |              |       |
|                                                                                     |       |           |       |              |       |
| Minority interest                                                                        |       | 9.6            |       | 16.2              |       |
|                                                                                     |       |           |       |              |       |
| **STOCKHOLDERS’ EQUITY**                                                            | ** ** | ** **     | ** ** | ** **        | ** ** |
|                                                                                     |       |           |       |              |       |
| Preferred stock                                                                          |       | —         |       | —            |       |
| Common stock                                                                             |       | 1.6            |       | 1.7               |       |
| Retained earnings                                                                        |       | 1,633.9        |       | 1,717.0           |       |
| Accumulated other comprehensive income                                                   |       | 3.2            |       | 4.8               |       |
| Total stockholders’ equity                                                          |       | 1,638.7        |       | 1,723.5           |       |
|                                                                                     |       |           |       |              |       |
| Total liabilities and stockholders’ equity                                          |       | $ 3,392.6 |       | $ 3,564.1    |       |
|                                                                                     |       |           |       |              |       |
| The accompanying notes are an integral part  of these consolidated financial statements. |       |           |       |              |       |

 

1

----

 

**JANUS CAPITAL GROUP INC.**

 

**CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)**

**(Dollars in Millions, Except Per Share Data)**

 
| ** **                                                  | ** ** | **Three  months ended** | ** ** | **Six  months ended** | ** ** |
|-------------------------------------------------------------|------------|-------------------------|------------|-----------------------|------------|
| ** **                                                  | ** ** | **June 30,**            | ** ** | **June 30,**          | ** ** |
| ** **                                                  | ** ** | **2008**                | ** ** | **2007**              | ** ** | **2008** | ** ** | **2007** | ** ** |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| **Revenues:**                                               | ** ** | ** **              | ** ** | ** **            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Investment management fees                                  |       | $ 239.8            |       | $ 220.6          |       | $ 465.3 |   | $ 421.5 |   |
| Performance fees                                            |       | 11.6                    |       | 3.8                   |       | 17.2 |   | 6.3 |   |
| Shareowner servicing fees and other                         |       | 52.8                    |       | 48.6                  |       | 102.9 |   | 93.1 |   |
| Total                                                       |       | 304.2                   |       | 273.0                 |       | 585.4 |   | 520.9 |   |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| **Operating Expenses:**                                     | ** ** | ** **              | ** ** | ** **            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Employee compensation and benefits                          |       | 91.6                    |       | 86.8                  |       | 183.4 |   | 174.2 |   |
| Long-term incentive compensation                            |       | 12.5                    |       | 17.0                  |       | 24.6 |   | 35.7 |   |
| Marketing and advertising                                   |       | 8.7                     |       | 5.0                   |       | 16.5 |   | 10.1 |   |
| Distribution                                                |       | 38.2                    |       | 34.5                  |       | 74.5 |   | 65.1 |   |
| Depreciation and amortization                               |       | 10.7                    |       | 8.7                   |       | 20.6 |   | 15.8 |   |
| General, administrative and occupancy                       |       | 37.4                    |       | 26.6                  |       | 71.2 |   | 56.7 |   |
| Total                                                       |       | 199.1                   |       | 178.6                 |       | 390.8 |   | 357.6 |   |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| **Operating Income**                                        |       | 105.1                   |       | 94.4                  |       | 194.6 |   | 163.3 |   |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| Interest expense                                            |       | (18.8                   | )          | (11.5                 | )          | (37.7 | ) | (21.0 | ) |
| Investment gains (losses), net                              |       | 3.0                     |       | 0.4                   |       | (6.5 | ) | 1.2 |   |
| Other income, net                                           |       | 1.0                     |       | 4.6                   |       | 5.2 |   | 10.2 |   |
| Income before taxes, equity earnings and  minority interest |       | 90.3                    |       | 87.9                  |       | 155.6 |   | 153.7 |   |
| Income tax provision                                        |       | (23.8                   | )          | (32.9                 | )          | (48.3 | ) | (56.3 | ) |
| Equity in earnings of unconsolidated  affiliate             |       | 2.3                     |       | 1.7                   |       | 4.3 |   | 3.4 |   |
| Minority interest in consolidated earnings                  |       | (3.2                    | )          | (5.1                  | )          | (7.0 | ) | (11.2 | ) |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| Income from continuing operations                           |       | 65.6                    |       | 51.6                  |       | 104.6 |   | 89.6 |   |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| Income (loss) from discontinued operations                  |       | 0.7                     |       | (2.8                  | )          | (0.9 | ) | (5.2 | ) |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| **Net Income**                                              |       | $ 66.3             |       | $ 48.8           |       | $ 103.7 |   | $ 84.4 |   |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| **Earnings per Share-Basic:**                               | ** ** | ** **              | ** ** | ** **            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Income from continuing operations                           |       | $ 0.41             |       | $ 0.29           |       | $ 0.65 |   | $ 0.49 |   |
| Income (loss) from discontinued operations                  |       | 0.00                    |       | (0.02                 | )          | (0.01 | ) | (0.03 | ) |
| Net income                                                  |       | $ 0.41             |       | $ 0.27           |       | $ 0.64 |   | $ 0.46 |   |
|                                                        |       |                    |       |                  |       |   |   |   |   |
| **Earnings per Share-Diluted:**                             | ** ** | ** **              | ** ** | ** **            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Income from continuing operations                           |       | $ 0.40             |       | $ 0.28           |       | $ 0.64 |   | $ 0.48 |   |
| Income (loss) from discontinued operations                  |       | 0.00                    |       | (0.02                 | )          | (0.01 | ) | (0.03 | ) |
| Net income                                                  |       | $ 0.41             |       | $ 0.27           |       | $ 0.64 |   | $ 0.45 |   |

 

The accompanying notes are an integral partof these consolidated financial statements.

 

2

----

 

**JANUS CAPITAL GROUP INC.**

** **

**CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

**(Dollars in Millions)**

 
| ** **                                                   | ** ** | **Six  months ended** | ** ** |
|--------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                   | ** ** | **June 30,**          | ** ** |
|                                                         | ** ** | **2008**              | ** ** | **2007** | ** ** |
| **CASH FLOWS PROVIDED BY (USED FOR):**                       | ** ** | ** **            | ** ** | ** ** | ** ** |
| **Continuing Operations**                                    | ** ** | ** **            | ** ** | ** ** | ** ** |
| **Operating Activities:**                                    | ** ** | ** **            | ** ** | ** ** | ** ** |
| Net income from continuing operations                        |       | $ 104.6          |       | $ 89.6 |   |
| Adjustments to net income:                                   |       |                  |       |   |   |
| Depreciation and amortization                                |       | 20.6                  |       | 15.8 |   |
| Deferred income taxes                                        |       | (4.0                  | )          | 26.0 |   |
| Minority interest in consolidated earnings                   |       | 7.0                   |       | 11.2 |   |
| Amortization of stock-based compensation                     |       | 17.5                  |       | 24.7 |   |
| Investment gains (losses), net                               |       | 6.5                   |       | (0.4 | ) |
| Payment of deferred commissions, net                         |       | (3.3                  | )          | (21.3 | ) |
| Other, net                                                   |       | 1.8                   |       | (3.0 | ) |
| Changes in working capital items:                            |       |                  |       |   |   |
| Accounts receivable                                          |       | 18.1                  |       | (10.7 | ) |
| Other current assets                                         |       | 2.4                   |       | 0.1 |   |
| Accounts payable and accrued compensation  payable           |       | (51.4                 | )          | (22.1 | ) |
| Other accrued liabilities                                    |       | (39.1                 | )          | 1.0 |   |
| Net operating                                                |       | 80.7                  |       | 110.9 |   |
|                                                         |       |                  |       |   |   |
| **Investing Activities:**                                    | ** ** | ** **            | ** ** | ** ** | ** ** |
| Purchase of property and equipment                           |       | (9.0                  | )          | (9.8 | ) |
| Acquisitions of INTECH                                       |       | (67.7                 | )          | (81.0 | ) |
| Purchase of marketable securities                            |       | (52.2                 | )          | (61.0 | ) |
| Proceeds from sales and maturities of  marketable securities |       | 45.9                  |       | 117.8 |   |
| Distribution of cash from discontinued  operations           |       | 13.5                  |       | — |   |
| Net investing                                                |       | (69.5                 | )          | (34.0 | ) |
|                                                         |       |                  |       |   |   |
| **Financing Activities:**                                    | ** ** | ** **            | ** ** | ** ** | ** ** |
| Proceeds from issuance of long-term debt                     |       | —                |       | 748.4 |   |
| Debt issuance costs                                          |       | —                |       | (6.9 | ) |
| Repayment of long-term debt                                  |       | —                |       | (158.1 | ) |
| Proceeds from stock plans                                    |       | 16.6                  |       | 41.4 |   |
| Excess tax benefit from equity-based compensation            |       | 4.0                   |       | 4.2 |   |
| Repurchase of common stock                                   |       | (217.8                | )          | (491.7 | ) |
| Distributions to minority interest                           |       | (12.5                 | )          | (22.6 | ) |
| Dividends paid to shareholders                               |       | (6.5                  | )          | (7.2 | ) |
| Net financing                                                |       | (216.2                | )          | 107.5 |   |
|                                                         |       |                  |       |   |   |
| **Cash and Cash Equivalents:**                               | ** ** | ** **            | ** ** | ** ** | ** ** |
| Net increase (decrease)                                      |       | (205.0                | )          | 184.4 |   |
| At beginning of period                                       |       | 480.7                 |       | 507.1 |   |
| At end of period                                             |       | $ 275.7          |       | $ 691.5 |   |
|                                                         |       |                  |       |   |   |
| **Discontinued Operations:**                                 | ** ** | ** **            | ** ** | ** ** | ** ** |
| Operating activities                                         |       | $ (5.2           | )          | $ (1.1 | ) |
| Investing activities                                         |       | 2.3                   |       | (0.9 | ) |
| Net decrease                                                 |       | (2.9                  | )          | (2.0 | ) |
| Cash at beginning of period                                  |       | 4.3                   |       | 52.6 |   |
| Cash at end of period                                        |       | $ 1.4            |       | $ 50.6 |   |
|                                                         |       |                  |       |   |   |
| **Supplemental Cash Flow Information:**                      | ** ** | ** **            | ** ** | ** ** | ** ** |
| Cash paid for interest                                       |       | $ 48.7           |       | $ 19.5 |   |
| Cash paid for income taxes                                   |       | $ 60.6           |       | $ 18.3 |   |

 

The accompanying notes are an integral partof these consolidated financial statements.

 

3

----

 

**JANUS CAPITAL GROUP INC.**

** **

**CONSOLIDATED STATEMENTS OF CHANGES INSTOCKHOLDERS’ EQUITY (UNAUDITED)**

**(Amounts in Millions, Except Per Share Data)**

 
| ** **                                                                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** **     | ** ** | **Accumulated**   | ** ** | ** **             | ** ** |
|------------------------------------------------------------------------------|------------|------------|------------|------------|------------|----------------|------------|-------------------|------------|------------------------|------------|
| ** **                                                                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** **     | ** ** | **Other**         | ** ** | **Total**              | ** ** |
| ** **                                                                   | ** ** | ** ** | ** ** | **Common** | ** ** | **Retained**   | ** ** | **Comprehensive** | ** ** | **Stockholders’** | ** ** |
| ** **                                                                   | ** ** | **Shares** | ** ** | **Stock**  | ** ** | **Earnings**   | ** ** | **Income**        | ** ** | **Equity**             | ** ** |
|                                                                         |       |       |       |       |       |           |       |              |       |                   |       |
| **Balance at December 31, 2006**                                             |       | 193.5      | ** ** | $ 1.9 |       | $ 2,293.4 |       | $ 11.1       |       | $ 2,306.4         |       |
|                                                                         |       |       |       |       |       |           |       |              |       |                   |       |
| Cumulative-effect adjustment for the adoption  of a new accounting principle |       |       | ** ** |       |       | 29.9           |       |              |       | 29.9                   |       |
| Net income                                                                   |       |       |       |       |       | 116.3          |       |              |       | 116.3                  |       |
| Net unrealized gain on marketable  securities                                |       |       |       |       |       |           |       | 5.2               |       | 5.2                    |       |
| Amortization of net loss on cash flow hedge                                  |       |       |       |       |       |           |       | 0.4               |       | 0.4                    |       |
| Reclassification for net gains included in  net income                       |       |       |       |       |       |           |       | (12.8             | )          | (12.8                  | )          |
| Foreign currency translation adjustment                                      |       |       |       |       |       |           |       | 0.9               |       | 0.9                    |       |
| *Comprehensive income*                                                       |       |       | * *   |       |       |           |       |              |       | 110.0                  |       |
| Amortization of stock-based compensation                                     |       |       |       |       |       | 50.1           |       |              |       | 50.1                   |       |
| Issuance and forfeitures of restricted  stock awards                         |       | 0.9        |       |       |       |           |       |              |       | —                 |       |
| Tax impact of stock-based compensation                                       |       |       |       |       |       | 6.7            |       |              |       | 6.7                    |       |
| Stock option exercises                                                       |       | 4.2        |       |       |       | 73.2           |       |              |       | 73.2                   |       |
| Common stock repurchased                                                     |       | (32.3      | )          | (0.2       | )          | (845.4         | )          |              |       | (845.6                 | )          |
| Common stock dividends ($ 0.04 per share)                               |       |       |       |       |       | (7.2           | )          |              |       | (7.2                   | )          |
| **Balance at December 31, 2007**                                             |       | 166.3      | ** ** | 1.7        |       | 1,717.0        |       | 4.8               |       | 1,723.5                |       |
| ** **                                                                   |       |       | ** ** |       |       |           |       |              |       |                   |       |
| Net income                                                                   |       |       |       |       |       | 103.7          |       |              |       | 103.7                  |       |
| Net unrealized loss on marketable  securities                                |       |       |       |       |       |           |       | (0.8              | )          | (0.8                   | )          |
| Reclassification for net gains included in  net income                       |       |       |       |       |       |           |       | (1.0              | )          | (1.0                   | )          |
| Amortization of net loss on cash flow hedge                                  |       |       |       |       |       |           |       | 0.2               |       | 0.2                    |       |
| *Comprehensive income*                                                       |       |       | * *   |       |       |           |       |              |       | 102.1                  |       |
| Amortization of stock-based compensation                                     |       |       |       |       |       | 16.5           |       |              |       | 16.5                   |       |
| Issuance and forfeitures of restricted  stock awards                         |       | 1.5        |       |       |       |           |       |              |       | —                 |       |
| Tax impact of stock-based compensation                                       |       |       |       |       |       | 3.5            |       |              |       | 3.5                    |       |
| Stock option exercises                                                       |       | 0.9        |       |       |       | 16.6           |       |              |       | 16.6                   |       |
| Common stock repurchased                                                     |       | (8.1       | )          | (0.1       | )          | (217.7         | )          |              |       | (217.8                 | )          |
| Change of interest in subsidiary                                             |       |       |       |       |       | 0.8            |       |              |       | 0.8                    |       |
| Common stock dividends ($ 0.04 per share)                               |       |       |       |       |       | (6.5           | )          |              |       | (6.5                   | )          |
| **Balance at June 30, 2008**                                                 |       | 160.6      | ** ** | $ 1.6 |       | $ 1,633.9 |       | $ 3.2        |       | $ 1,638.7         |       |

 

The accompanying notes are an integral partof these consolidated financial statements.

 

4

----

 

**JANUS CAPITAL GROUP INC.**

 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

***(Unaudited)***

 

**Note 1 –Basis of Presentation**

 

Inthe opinion of Janus Capital Group Inc. (collectively, “Janus” or the “Company”)management, the accompanying unaudited interim consolidated financialstatements contain all adjustments necessary to fairly present the financialposition, results of operations and cash flows of the Company in accordancewith accounting principles generally accepted in the United States of America (“GAAP”).  All such adjustments are of a normalrecurring nature.  Such unaudited interimfinancial statements have been prepared in accordance with the instructions to Form 10-Qpursuant to the rules and regulations of the Securities and ExchangeCommission (“SEC”).  Certain informationand footnote disclosures normally included in financial statements prepared inaccordance with GAAP have been condensed or omitted pursuant to such rules andregulations.  These consolidatedfinancial statements should be read in conjunction with the Company’s AnnualReport on Form 10-K for the year ended December 31, 2007.

 

Theaccompanying consolidated financial statements have been prepared on aconsistent basis with the accounting policies described in Note 2 to theconsolidated financial statements that are presented in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2007.

 

**Note 2 –Recent Accounting Pronouncements**

 

In December 2007,the Financial Accounting Standards Board (“FASB”) issued Statement of FinancialAccounting Standard No. 141 (revised 2007), “Business Combinations” (“SFAS141R”), which establishes principles and requirements for how an acquirerrecognizes and measures the identifiable assets acquired, the liabilitiesassumed and any noncontrolling interest in an acquiree, including therecognition and measurement of goodwill acquired in a businesscombination.  The effective date of SFAS141R is the Company’s fiscal year beginning January 1, 2009.  Janus will apply SFAS 141R to any futureacquisitions completed on or after January 1, 2009.

 

In December 2007,the FASB issued Statement of Financial Accounting Standard No. 160, “NoncontrollingInterests in Consolidated Financial Statements, an amendment of AccountingResearch Bulletin No. 51” (“SFAS 160”), which establishes accounting andreporting standards for the noncontrolling interest in a subsidiary, andrequires noncontrolling interests to be classified as a component of equity inthe consolidated financial statements. The effective date of SFAS 160 is the Company’s fiscal year beginning January 1,2009.  Subsequently, the SEC announcedrevisions to Emerging Issues Task Force (“EITF”) Topic D-98 “Classification andMeasurement of Redeemable Securities” (“EITF D-98”) which clarified thatnoncontrolling interests that are redeemable and whose redemption is not solelycontrolled by the issuer are not within the scope of SFAS 160.  Such interests are within the scope of EITFD-98 which requires that redeemable noncontrolling interests be classifiedoutside of permanent equity at the aggregate of the redemption value andundistributed earnings attributable to the noncontrolling interest at eachbalance sheet date.  The effective dateof EITF D-98 is the Company’s fiscal year beginning January 1, 2009.  Janus has not yet completed an assessment ofthe impact of SFAS 160 and EITF D-98.

 

In March 2008, theFASB issued Statement of Financial Accounting Standard No. 161, “Disclosuresabout Derivative Instruments and Hedging Activities, an amendment of FASBStatement No. 133” (“SFAS 161”), which requires enhanced disclosures aboutan entity’s derivative and hedging activities. The effective date of SFAS 161 is the Company’s fiscal year beginning January 1,2009.  Janus has not yet completed anassessment of the impact of SFAS 161.

 

5

----

 

**Note 3 – Earnings Per Share**

 

Basic earnings per commonshare is calculated by dividing net income by the weighted average number ofcommon shares outstanding during the period. Diluted earnings per common share adjusts the weighted average sharesoutstanding by the dilutive impact of shares underlying stock options andunvested restricted stock awards.  Thefollowing is a summary of the earnings per share calculation *(in millions, except per share data)*:

 
|                                                | ** ** | **Three  months ended** | ** ** | **Six  months ended** | ** ** |
|-----------------------------------------------------|------------|-------------------------|------------|-----------------------|------------|
|                                                | ** ** | **June 30,**            | ** ** | **June 30,**          | ** ** |
|                                                | ** ** | **2008**                | ** ** | **2007**              | ** ** | **2008** | ** ** | **2007** | ** ** |
| Income from continuing operations                   |       | $ 65.6             |       | $ 51.6           |       | $ 104.6 |   | $ 89.6 |   |
| Income (loss) from discontinued operations          |       | 0.7                     |       | (2.8                  | )          | (0.9 | ) | (5.2 | ) |
|                                                |       |                    |       |                  |       |   |   |   |   |
| **Net income**                                      |       | $ 66.3             |       | $ 48.8           |       | $ 103.7 |   | $ 84.4 |   |
|                                                |       |                    |       |                  |       |   |   |   |   |
| **Basic earnings per share**                        | ** ** | ** **              | ** ** | ** **            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Weighted average common shares outstanding          |       | 160.4                   |       | 180.1                 |       | 161.5 |   | 183.7 |   |
|                                                |       |                    |       |                  |       |   |   |   |   |
| Income from continuing operations                   |       | $ 0.41             |       | $ 0.29           |       | $ 0.65 |   | $ 0.49 |   |
| Income (loss) from discontinued operations          |       | 0.00                    |       | (0.02                 | )          | (0.01 | ) | (0.03 | ) |
|                                                |       |                    |       |                  |       |   |   |   |   |
| Basic earnings per share                            |       | $ 0.41             |       | $ 0.27           |       | $ 0.64 |   | $ 0.46 |   |
|                                                |       |                    |       |                  |       |   |   |   |   |
| **Diluted earnings per share**                      | ** ** | ** **              | ** ** | ** **            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Weighted average common shares outstanding          |       | 160.4                   |       | 180.1                 |       | 161.5 |   | 183.7 |   |
| Dilutive effect of stock options and  unvested      |       |                    |       |                  |       |   |   |   |   |
| restricted stock using the treasury stock  method   |       | 2.0                     |       | 2.3                   |       | 1.6 |   | 1.8 |   |
| Weighted average diluted common shares  outstanding |       | 162.4                   |       | 182.4                 |       | 163.1 |   | 185.5 |   |
| Income from continuing operations                   |       | $ 0.40             |       | $ 0.28           |       | $ 0.64 |   | $ 0.48 |   |
| Income (loss) from discontinued operations          |       | 0.00                    |       | (0.02                 | )          | (0.01 | ) | (0.03 | ) |
|                                                |       |                    |       |                  |       |   |   |   |   |
| Diluted earnings per share                          |       | $ 0.41             |       | $ 0.27           |       | $ 0.64 |   | $ 0.45 |   |

 

The following stock options and unvested restrictedstock are anti-dilutive and have not been included in the weighted averagediluted shares outstanding calculation *(in millions)*:

 
|                      | ** ** | **Three  months ended** | ** ** | **Six  months ended** | ** ** |
|---------------------------|------------|-------------------------|------------|-----------------------|------------|
|                      | ** ** | **June 30,**            | ** ** | **June 30,**          | ** ** |
|                      | ** ** | **2008**                | ** ** | **2007**              | ** ** | **2008** | ** ** | **2007** | ** ** |
| Stock options             |       | 3.6                     |       | 4.8                   |       | 3.6 |   | 5.5 |   |
| Unvested restricted stock |       | —                  |       | —                |       | 0.5 |   | — |   |

 

**Note 4 – Acquisitions**

 

***INTECH***

 

Each fiscal year through2012, each of the two founding members of Enhanced Investment Technologies, LLC(“INTECH”) has the option to require Janus to purchase from him an ownershipinterest up to approximately 1.5% in INTECH at the fair market value of suchinterest.  On March 31, 2008, thetwo INTECH founding members exercised their right and Janus increased itsownership of INTECH to approximately 89.5% with the purchase of an additional3% ownership interest for $60.7 million in cash.  The pro forma results of operations have notbeen presented as they would not have been materially different from reportedamounts.  The preliminary purchase priceallocations resulted in the recognition of $23.7 million of intangible assetsand $37.0 million of goodwill. Intangible assets represent customer relationships and are preliminarilybeing amortized over 12 years.

 

***Perkins, Wolf, McDonnell andCompany, LLC (“PWM”)***

 

OnJuly 7, 2008, Janus agreed to purchase an additional 50% interest in PWMfor $90.0 million in cash.  Janus currently holds a 30% interest in PWM,which specializes in fundamental value-disciplined investing and is the namedsubadvisor of Janus’ small- and mid-cap value products.  The additionalinterest in PWM will facilitate the build-out of Janus’ value 

 

6

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investmentproduct offerings.  Pending the satisfaction of customary conditionsincluding the approval of the change in control of PWM by regulators and Janus’value mutual fund shareholders, the acquisition is expected to close in thefourth quarter 2008.

 

Uponclosing the transaction, PWM will grant profit interest awards designed toretain and incentivize key employees to grow the business which vest on thefifth anniversary of grant. The awards are generally entitled to a total of 5%of PWM’s annual net income and have a formula-driven terminal value based onrevenue growth and relative investment performance of products managed byPWM.  Janus can terminate any or all of the awards (i) on the fifth,seventh or each subsequent anniversary of grant by paying the relevant portionof the formula-based terminal value, or (ii) prior to the fifthanniversary of grant if the formula yields a terminal value of $40.0million.  Participants can require Janus to terminate the awards inexchange for the then-applicable formula price on the sixth anniversary ofgrant.  The profit interests are also subject to termination at premiumsor discounts to the formula at the option of Janus or the relevant employee, asapplicable, upon certain corporate or employment-related events affecting PWMor the relevant employee.  Compensationexpense for these awards will be recognized over the vesting period based onthe results of the hypothetical application of the terminal value formula at theend of each relevant reporting period.

 

Janusalso has the option to acquire any or all of the remaining 20% interest of PWMat fair value on the third, fifth, seventh or each subsequent anniversary ofclosing. The minority owners have the option to require Janus to purchase anyor all of their remaining interests on the fourth or sixth anniversary ofclosing at fair value.

 

**Note 5 – DiscontinuedOperations**

 

Duringthe second quarter 2008, Janus disposed of its Printing and Fulfillmentoperations.  On April 9, 2008, thedigital print operations were sold to Bowne & Co., Inc. for $14.5million.  The offset operations were alsosold in the second quarter 2008 for an immaterial amount.  The liquidation of the remaining assets isnot expected to have a material impact on Janus’ operating results in futureperiods.

 

**Note 6 –Adoption of New Accounting Principle**

 

Janusadopted the provisions of Statement of Financial Accounting Standard No. 157,“Fair Value Measurements” (“SFAS 157”), on January 1, 2008.  SFAS 157 defines fair value as the price thatwould be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.  SFAS 157 also establishes a framework formeasuring fair value and a valuation hierarchy based upon the transparency ofinputs used in the valuation of an asset or liability.  Classification within the hierarchy is basedupon the lowest level of input that is significant to the fair valuemeasurement. The valuation hierarchy contains three levels:

 

·                  Level1 – Valuation inputs are unadjusted quoted market prices for identical assetsor liabilities in active markets.

·                  Level2 – Valuation inputs are quoted prices for identical assets or liabilities inmarkets that are not active, quoted market prices for similar assets andliabilities in active markets and other observable inputs directly orindirectly related to the asset or liability being measured.

·                  Level3 – Valuation inputs are unobservable and significant to the fair valuemeasurement.

 

Level1 fair value measurements consist of exchange-traded equity and debt securitiesunderlying separate accounts and consolidated mutual funds, and mutual fundsecurities.

 

Level3 fair value measurements consist of securities issued by Stanfield VictoriaFunding LLC (“Stanfield securities”), a structured investment vehicle thatpurchased high grade medium- and long-term fixed-income instruments financed byissuing low-cost, short-term senior debt instruments such as asset-backedcommercial paper and asset-backed medium-term notes.  Due to illiquidity in the commercial paperand capital markets, there are currently no active markets for the Stanfieldsecurities.  To measure fair value, Janusundertook a detailed analysis of the assets underlying the Stanfield securitiesand benchmarked those assets against instruments of a similar type withcomparable yields, maturities and credit ratings for which quoted market pricesare readily available.  Discounts havebeen applied to the quoted market prices of the benchmark instruments to adjustfor varying yields, credit ratings or other distinguishingcharacteristics.  The valuationmethodology for the Stanfield securities has been consistently applied.  Because of the significance of theunobservable inputs in Janus’ analysis, the fair value measurement of theStanfield securities has been classified as level 3.

 

7

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The following table presents the marketable securitiescarried at fair value as of June 30, 2008 *(inmillions)*:

 
|                                     | ** ** | **Level 1**  | ** ** | **Level 2**   | ** ** | **Level 3**   | ** ** |
|------------------------------------------|------------|--------------|------------|---------------|------------|---------------|------------|
| Trading securities                       |       | $ 99.6  |       | $ — |       | $ — |       |
|                                     |       |         |       |          |       |          |       |
| Available-for-sale securities            |       |         |       |          |       |          |       |
| Investments in advised funds             |       | 11.2         |       | —        |       | —        |       |
| Structured investment vehicle securities |       | —       |       | —        |       | 90.3          |       |
|                                     |       |         |       |          |       |          |       |
| Other assets                             |       |         |       |          |       |          |       |
| Mutual fund unit award hedge asset       |       | 47.0         |       | —        |       | —        |       |
| Deferred compensation hedge asset        |       | 6.5          |       | —        |       | —        |       |
|                                     |       |         |       |          |       |          |       |
| Total assets at fair value               |       | $ 164.3 |       | $ — |       | $ 90.3   |       |

 

Janus measured the fairvalue of the Stanfield securities as of June 30, 2008, and determined thatthe valuation was consistent with the previously reported amount of $90.3million as of March 31, 2008.  Therewere no other securities classified as level 3 during the three and six monthsended June 30, 2008.

 

Janus also uses fairvalue measurements for business acquisitions and impairment testing of tangibleand intangible assets.  On February 8,2008, the FASB issued Staff Position 157-2, “Effective Date of FASB 157” (“FSP157-2”) which deferred the provisions of SFAS 157 to annual periods beginningafter November 15, 2008 for such fair value measurements.  The application of the provisions of SFAS 157will result in additional disclosures but are not expected to have a materialimpact on Janus’ fair value measurements associated with business acquisitionsand impairment testing.

 

**Note 7 – Seed Capital Investments**

 

Janus periodically adds new investment strategies toits mutual fund and other product (collectively referred to herein as “investmentproducts”) offerings by seeding investment products.  Seeded investment products are initiallyconsolidated and the individual securities within the portfolio are accountedfor as trading securities.  Janus will consolidatesuch investment products as long as it holds a controlling interest, defined asgreater than 50% ownership.  Upondeconsolidation, Janus accounts for its investments as available-for-salesecurities.

 

Janus may redeem investedseed capital for a variety of reasons, including when third-party capitalinvested in the relevant product is sufficient to sustain the given investmentstrategy.  Janus recognized $1.5 millionand $1.6 million of gains from the redemption of seed capital investments for thethree and six months ended June 30, 2008, respectively.  There were no redemptions of seed capitalinvestments for the three months ended June 30, 2007.  Gains for the six months ended June 30,2007 totaled $0.4 million.

 

Investments in seed capital are classified as follows:

 

***Trading Securities***

 

At June 30, 2008, seed capital investmentsclassified as trading securities totaled $99.6 million.  Trading securities are carried in Janus’consolidated financial statements at fair market value, with changes in valuerecognized as gains and losses currently in earnings.

 

***Available-for-SaleSecurities***

 

At June 30, 2008,seed capital investments classified as available-for-sale totaled $11.2million.  Available-for-sale securitiesare carried in Janus’ consolidated financial statements at fair market value,with changes in value recognized as gains and losses in other comprehensiveincome.  Accumulated gains and losses arereclassified to earnings when the securities are sold.

 

Prior to the fourthquarter 2007, Janus accounted for all seed account investments asavailable-for-sale securities with unrealized gains and losses recorded as acomponent of other comprehensive income. In the fourth quarter 2007, Janus evaluated its seed capital investmentsand determined that investment products in which Janus owns a majority interestshould be consolidated with changes in value recognized as gains and losses inearnings.  Janus assessed the impact to2007 and prior years under Staff Accounting Bulletin (“SAB”) Topic 1M “Materiality”and SAB 108 “Quantifying 

 

8

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Misstatements” andconcluded that the impact was not quantitatively material to 2007 results inthe aggregate or any individual previous year. Janus reclassified the $17.6 million of unrealized gains associated withseed capital investments into 2007 earnings.

 

**Note 8 – Long-Term Incentive Compensation**

 

Janus granted $82.8 million in long-term incentiveawards during the first six months of 2008, which will generally be recognizedratably over a three-year period and are not subject to performance-basedaccelerated vesting.  The 2008 awardsconsisted of $28.4 million of restricted stock (1.0 million shares at aweighted average price of $27.69 per share), $20.5 million of stock options and$33.9 million of mutual fund units.

 

A total of 2.1 millionstock options with a grant date fair value of $10.02 per option were awarded aspart of the February 2008 grants. The grant date fair value of stock options was determined using theBlack-Scholes model with the following assumptions: expected volatility of 32%,dividend yield of 0.13%, risk-free interest rate of 2.81% and an expected lifeof five years.

 

In addition to the grantsdescribed above, retention grants were awarded to certain Janus investment teammembers and certain INTECH employees to facilitate succession planning andincentivize key personnel to remain with the Company.  The Janus investment team retention granttotaled $21.0 million (0.7 million shares of restricted stock at $28.83 pershare) and will be recognized ratably over a four-year period.  The INTECH retention grant totaled $10.0million and will be recognized ratably over a ten-year period.  The retention grants are not subject toperformance-based accelerated vesting.

 

**Note 9 – Other Income, Net**

 

The components of other income are as follows *(in millions)*:

 
|            | ** ** | **Three  months ended** | ** ** | **Six  months ended** | ** ** |
|-----------------|------------|-------------------------|------------|-----------------------|------------|
|            | ** ** | **June 30,**            | ** ** | **June 30,**          | ** ** |
|            | ** ** | **2008**                | ** ** | **2007**              | ** ** | **2008** | ** ** | **2007** | ** ** |
| Dividend income |       | $ —           |       | $ 2.9            |       | 0.7 |   | 5.9 |   |
| Interest income |       | 1.4                     |       | 1.7                   |       | 3.9 |   | 4.3 |   |
| Other, net      |       | (0.4                    | )          | —                |       | 0.6 |   | — |   |
| Total           |       | $ 1.0              |       | $ 4.6            |       | $ 5.2 |   | $ 10.2 |   |

 

**Note 10 –Income Taxes**

 

Janus’ statutory tax ratewill decrease by approximately 1% from the current rate of 38.25% effective January 1,2009 as a result of a legislative change in Colorado state income taxes enactedduring the second quarter 2008.  A netbenefit of $10.8 million was recognized during the second quarter 2008 as aresult of applying the estimated lower rate to deferred tax assets andliabilities expected to be realized or settled on or after the effective dateof the change in taxes.

 

**Note 11 –Legal Proceedings**

 

Janus is subject tovarious legal proceedings arising from normal business operations. Althoughthere can be no assurances, based on information currently available,management believes that it is probable that the ultimate outcome of each ofthe actions described below will not have a material adverse effect on Janus’consolidated financial condition. However, an adverse outcome in any of theactions could have a material adverse effect on the Company’s financial resultsin the period in which it is recorded. As of June 30, 2008, Janus had nolitigation reserves as management believes that the remaining claims made inthe civil actions described below have little or no merit and intends to defendagainst them.

 

9

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***Market Timing Litigation***

 

Following themarket timing investigations by the New York Attorney General (“NYAG”) and theSEC in 2003, Janus and certain affiliates were named as defendants in aconsolidated lawsuit in the U.S. District Court in Baltimore, Maryland (*Case No. MDL No. 1586, 04-MD-15863*).  Five amended complaints were filed in thesecoordinated proceedings, including: (i) claims by a putative class ofJanus fund investors asserting claims on behalf of the investor class (*Marini, et al. v. Janus Investment Fund, et al., U.S. District Court,District of Maryland, Case No. 04-CV-00497*);  (ii) derivative claims by investors inthe Janus funds ostensibly on behalf of the Janus funds (*Steinberg etal. v. Janus Capital Management, LLC et al., U.S. District Court, District ofMaryland, Case No. 04-CV-00518*); (iii) claims on behalf ofparticipants in the Janus 401(k) plan (*Wangberger v. JanusCapital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court,District of Maryland, Case No. JFM-05-2711*); (iv) claimsbrought on behalf of shareholders of Janus on a derivative basis against Janus’Board of Directors (*Chasen v. Whiston, et al.,U.S. District Court, District of Maryland, Case No. 04-MD-00855*);and (v) claims by a putative class of Janus shareholders asserting claimson behalf of the shareholders (*Wiggins, et al. v. JanusCapital Group Inc., et al.*, *U.S. District Court, Districtof Maryland, Case No. 04-CV-00818).*

 

InAugust 2005, the U.S. District Court entered orders dismissing most of theclaims asserted against the Company and its affiliates by fund investors in the*Marini* and *Steinberg*cases described above, except certain claims under Section 10(b) ofthe Securities Exchange Act of 1934 and under Section 36(b) of theInvestment Company Act of 1940.  Janus’Motion for Summary Judgment requesting dismissal of the remaining claims iscurrently pending.  The U.S. DistrictCourt also entered an order dismissing all claims in the *Wiggins*lawsuit.  Plaintiffs have appealed thatdismissal to the U.S. Court of Appeals for the Fourth Circuit.  That appeal is currently pending.  In August 2006, the U.S. District Courtin the *Wangberger* 401(k) plan class actiondismissed the action with prejudice, and the plaintiff appealed the dismissalto the U.S. Court of Appeals for the Fourth Circuit.  In June 2008, the Fourth Circuitreversed the U.S. District Court’s order of dismissal and remanded the case forfurther proceedings.  Finally, the U.S.District Court also dismissed the *Chasen* lawsuitagainst Janus’ Board of Directors without leave to amend, ruling that theplaintiff had failed to make a pre-suit demand on the Board of Directors asrequired by applicable state law. The time to appeal this dismissal hasexpired.  As a result of the aboveevents, the Company and Janus Capital Management LLC are the remainingdefendants, in some capacity, in one or more of the actions described in thepreceding paragraph.

 

TheAuditor of the State of West Virginia, in his capacity as securitiescommissioner, initiated administrative proceedings against many of thedefendants in the market timing cases (including Janus) and seeks disgorgementand other monetary relief based on similar market timing allegations (*In the Matter of Janus Capital Group Inc. et al., Before the SecuritiesCommissioner, State of West Virginia, Summary Order No. 05-1320*).  In September 2006, Janus filed itsanswer to the Auditor’s summary order instituting proceedings, and requested ahearing.  A hearing was held in June 2007during which the parties were ordered to submit a scheduling order.  In addition to the currently pending Motionto Discharge Order to Show Cause, Janus continues to challenge the statutoryauthority of the Auditor to bring such an action.

 

***MiscellaneousProceedings***

 

During 2007, two former portfoliomanagers filed suit against a Janus subsidiary alleging that it implementedcertain changes to their compensation arrangements in violation of prioragreements *(Edward Keely v. Janus Management HoldingsCorporation, Denver District Court, Case No. 2007 CV 7366* and *Tom Malley v. Janus Management Holdings Corporation, Denver DistrictCourt, Case No. 2007 CV 10719)*. Janus answered the complaints, denying any liability and challenging themerits of Mr. Keely’s and Mr. Malley’s allegations.  Trials for the suits brought by Mr. Keelyand Mr. Malley are scheduled for October 2008 and December 2008,respectively.

 

10

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**Item2.     Management’s Discussion andAnalysis of Financial Condition and Results of Operations**

 

**FORWARD-LOOKING STATEMENTS**

 

*This Quarterly Report on Form 10-Qcontains “forward-looking statements” within the meaning of the PrivateSecurities Litigation Reform Act of 1995. In addition, Janus Capital Group Inc. (collectively, “Janus” or the “Company”)may make other written and oral communications from time to time that containsuch statements.  Forward-lookingstatements include statements as to industry trends and future expectations ofthe Company and other matters that do not relate strictly to historical factsand are based on certain assumptions by management.  These statements are often identified by theuse of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,”“could,” “should,” “estimate” or “continue,” and similar expressions orvariations.  These statements are basedon the beliefs and assumptions of the Company management based on informationcurrently available to management.  Suchforward-looking statements are subject to risks, uncertainties and otherfactors that could cause actual results to differ materially from futureresults expressed or implied by such forward-looking statements. Importantfactors that could cause actual results to differ materially from theforward-looking statements include, among others, the risks described in theCompany’s filings with the Securities and Exchange Commission, including thosein Part I, Item 1A, Risk Factors, and elsewhere in Janus’ Annual Report onForm 10-K for the year ended December 31, 2007.   Janus cautions readers to carefully considersuch factors.  Furthermore, suchforward-looking statements speak only as of the date on which such statementsare made.  Except as required byapplicable law, Janus undertakes no obligation to update any forward-lookingstatements to reflect events or circumstances after the date of suchstatements.*

 

**AVAILABLE INFORMATION**

 

Copies of Janus Capital GroupInc.’s (collectively, “Janus” or the “Company”) filings with the Securities andExchange Commission (“SEC”) can be obtained from the SEC’s Public Reference Room at100 F Street, N.E., Washington, D.C. 20549. Information can be obtained about the operation of the Public Reference Room bycalling the SEC at 1-800-SEC-0330.  TheSEC also maintains an Internet site that contains reports, proxy andinformation statements, and other information regarding issuers that fileelectronically with the SEC at http://www.sec.gov.

 

Janus makes availablefree of charge its annual reports on Form 10-K, quarterly reports on Form 10-Qand current reports on Form 8-K and amendments thereto as soon asreasonably practical after such filing has been made with the SEC.  Reports may be obtained through the InvestorRelations section of Janus’ website (http://ir.janus.com) or by contactingJanus at (888) 834-2536.  Thecontents of Janus’ website are not incorporated herein for any purpose.

 

Janus’ Officer Code ofEthics for Principal Executive Officer and Senior Financial Officers (includingits chief executive officer, chief financial officer and controller) (the “OfficerCode”); Corporate Code of Business Conduct and Ethics for all employees;corporate governance guidelines; and the charters of key committees of theBoard of Directors (including the Audit, Compensation, Nominating and CorporateGovernance, and Planning and Strategy committees) are available on its website(http://ir.janus.com/governance.cfm), and printed copies are available to anyshareholder upon request by calling Janus at (888) 834-2536.  Any futureamendments to or waivers of the Officer Code will be posted to the InvestorRelations section of Janus’ website.

 

**RESULTS OF OPERATIONS**

 

**Overview**

** **

Janus provides investmentmanagement and administrative services to mutual funds, separate accounts andinstitutional clients in both domestic and international markets through itsprimary subsidiaries, Janus Capital Management LLC (“Janus ex-INTECH”) andEnhanced Investment Technologies, LLC (“INTECH”).

 

Revenues are generallybased upon a percentage of the market value of assets under management and arecalculated as a percentage of the daily average asset balance in accordancewith contractual agreements with the Company’s mutual funds, separate accountsand subadvised relationships (collectively referred to herein as “investmentproducts”).  Certain investment productsare also subject to performance fees that vary based on their relativeperformance as compared to a benchmark index and the level of assets subject tosuch fees.  Assets under managementprimarily consist of domestic and international equity and debtsecurities.  Accordingly, fluctuations inthe financial markets, relative investment performance, sales and redemptionsof investment products, and changes in the composition of assets undermanagement are all factors that have a direct effect on Janus’ operatingresults.

 

11

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**INVESTMENT MANAGEMENT OPERATIONS(CONTINUING OPERATIONS)**

 

Highlights for thecurrent quarter include:

 

·                  Long-term net inflows of $5.0 billionwere the highest quarterly amount since the third quarter 2000.

·                  Relative investment performance remainedstrong despite challenging market conditions, with approximately 78%, 81% and83% of Janus’ mutual funds in the top half of their Lipper categories on aone-, three- and five-year total return basis, respectively, as of June 30,2008.

·                  Net income from continuing operations was$65.6 million, or $0.40 per diluted share.

·                  Operating margin totaled 34.5%.

·                  Announced plans to acquire an additional50% interest in Perkins, Wolf, McDonnell and Company, LLC (“PWM”).

·                  Repurchased 2.6 million shares of Januscommon stock at a total price of $75.0 million.

 

**Assets Under Management and Flows**

 
| ** **                      | ** ** | **Three  months ended June 30,** | ** ** | **Six  months ended June 30,** | ** ** |
|---------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                      | ** ** | **2008**                         | ** ** | **2007**                       | ** ** | **2008** | ** ** | **2007** | ** ** |
| * *                        | ** ** | **(in  billions)**               | ** ** | **(in  billions)**             | ** ** |
| * *                        | * *   | * *                         | * *   | * *                       | * *   | * * | * * | * * | * * |
| Beginning of period assets      |       | $ 187.6                     |       | $ 176.2                   |       | $ 206.7 |   | $ 167.7 |   |
| Long-term sales                 |       |                             |       |                           |       |   |   |   |   |
| Janus ex-INTECH                 |       | 11.7                             |       | 8.1                            |       | 21.2 |   | 15.2 |   |
| INTECH                          |       | 2.5                              |       | 4.5                            |       | 4.3 |   | 9.5 |   |
| Long-term redemptions           |       |                             |       |                           |       |   |   |   |   |
| Janus ex-INTECH                 |       | (6.9                             | )          | (6.6                           | )          | (16.8 | ) | (13.7 | ) |
| INTECH                          |       | (2.3                             | )          | (3.2                           | )          | (5.2 | ) | (5.1 | ) |
| Long-term net flows*            |       |                             |       |                           |       |   |   |   |   |
| Janus ex-INTECH                 |       | 4.8                              |       | 1.5                            |       | 4.4 |   | 1.5 |   |
| INTECH                          |       | 0.2                              |       | 1.3                            |       | (0.9 | ) | 4.4 |   |
| Total long-term net flows       |       | 5.0                              |       | 2.8                            |       | 3.5 |   | 5.9 |   |
| Net money market flows          |       | (0.4                             | )          | 1.3                            |       | (1.0 | ) | 2.8 |   |
| Market / fund performance       |       | (0.4                             | )          | 10.3                           |       | (17.4 | ) | 14.2 |   |
| End of period assets            |       | $ 191.8                     |       | $ 190.6                   |       | $ 191.8 |   | $ 190.6 |   |
| * *                        | * *   | * *                         | * *   | * *                       | * *   | * * | * * | * * | * * |
| Average assets under management |       |                             |       |                           |       |   |   |   |   |
| Janus ex-INTECH                 |       | $ 123.6                     |       | $ 108.0                   |       | $ 118.9 |   | $ 103.7 |   |
| INTECH                          |       | 64.8                             |       | 69.9                           |       | 63.9 |   | 67.1 |   |
| Money Market                    |       | 11.7                             |       | 10.3                           |       | 12.0 |   | 9.4 |   |
| Total                           |       | $ 200.1                     |       | $ 188.2                   |       | $ 194.8 |   | $ 180.2 |   |

 

----

| * | Excludes money market  flows. Sales and redemptions of money market funds are presented net on a  separate line due to the short-term nature of the investments. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Total average assetsunder management increased 6.3% and 8.1%, for the three- and six-month periodsended June 30, 2008, respectively, as compared to the same periods in2007.  The increase in average assetsunder management is a result of market appreciation during 2007 and continuedpositive long-term net flows, partially offset by challenging market conditionsduring 2008.

 

Janus ex-INTECH long-termnet flows improved by $3.3 billion and $2.9 billion for the three- and sixmonth periods ended June 30, 2008, respectively, from higher gross salesthrough the retail intermediary and international channels as a result ofexpansion efforts over the last several years and strong relative investmentperformance.

 

INTECH’s sales andredemptions continue to be negatively impacted by clients reallocating assetsfrom INTECH to other investment strategies and the relative underperformance ofcertain key investment strategies in early 2008 and most of 2007.

 

12

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**Results of Investment Management Operations**

 

##### ***ThreeMonths Ended June 30, 2008, Compared with Three Months Ended June 30,2007***

##### *** ***

***Revenues***

 

Investment management fees increased $19.2 million, or8.7%, primarily as a result of the 6.3% increase in average assets undermanagement.  Revenue increased at aslightly higher rate than average assets under management as a result ofincreased average assets in higher yielding Janus ex-INTECH products.

 

Performance fee revenueis derived from certain mutual funds and separate accounts.  The $7.8 million increase in revenue wasprimarily due to a separate account reaching its one-year anniversary duringthe second quarter 2008 on which the first contractual performance fee wasrecognized for the previous twelve months. Future performance fees earned on this account will be recognizedquarterly, consistent with a majority of Janus’ separate account performance feestructures.

 

Shareowner servicing feesand other revenue improved $4.2 million over the comparable prior year periodprimarily as a result of an increase in transfer agent fees.  Transfer agent fees are based on averageassets under management in Janus’ retail fund series (Janus Investment Fund),excluding money market assets, which increased 5.5% over the comparable priorperiod.

 

***Expenses***

 

Employee compensation andbenefits increased due to an 11% growth in the average number of employees andhigher investment team compensation from strong investment performance andhigher revenue.  The investment teamcompensation plan is linked to individual performance, but also ties theaggregate level of compensation to revenue.

 

Long-term incentivecompensation decreased quarter-to-quarter primarily as a result of a decline inthe performance-based acceleration of previous awards based on expected 2008financial performance, partially offset by an increase related to the 2008annual grant awarded in February.  Thesecond quarter 2007 includes a $2.5 million charge for departure-relatedaccelerated vesting of long-term incentive awards.

 

Marketing and advertisingexpenses increased $3.7 million due to higher marketing expenses from expansionefforts in the retail intermediary and international sales channels.

 

Distribution expenseincreased $3.7 million, or 10.7%, from a similar increase in assets undermanagement subject to third-party concessions. Distribution fees are calculated based on a contractual percentage ofthe market value of assets under management distributed through third-partyintermediaries and are primarily related to Janus ex-INTECH investmentproducts.

 

Depreciation andamortization expenses increased $2.0 million primarily as a result of the amortizationof deferred commissions from higher sales of Janus Adviser Series C sharesand the amortization of intangibles related to the March 2008 acquisitionof an additional 3% interest in INTECH.

 

General, administrativeand occupancy expense increased $10.8 million primarily from higher legal costsassociated with ongoing litigation and rent related to internationalexpansion.  Second quarter 2007 includedthe release of $6.3 million of legal reserves.

 

Interest expenseincreased $7.3 million as a result of the issuance of additional debt in June 2007.

 

Net investment gains of$3.0 million for the three months ended June 30, 2008, were driven bymark-to-market adjustments on consolidated investment products and realizedgains from the redemption of certain seed capital investments.  Mutual funds and separate accounts in whichJanus owns a majority interest are consolidated, with changes in market valuereported in current period earnings. Future earnings will be impacted by fluctuations in the fair value measurementsand amount of consolidated investments.

 

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Minority interest inconsolidated earnings consists primarily of INTECH earnings which declined as aresult of lower performance fees earned on separate accounts and lower averageassets under management in the relevant investment products.

 

The income tax provisionfor the second quarter 2008 includes a $10.8 million tax benefit as a result ofapplying a lower tax rate to deferred tax assets and liabilities expected to berealized or settled on or after January 1, 2009.  Janus’ tax rate will decrease byapproximately 1% from the current rate effective January 1, 2009 as aresult of a legislative change in Colorado state taxes enacted during thesecond quarter 2008.

 

##### ***SixMonths Ended June 30, 2008, Compared with Six Months Ended June 30,2007***

##### *** ***

***Revenues***

 

Investment management fees increased $43.8 million, or10.4%, primarily as a result of the 8.1% increase in average assets undermanagement.  Revenue increased at aslightly higher rate than average assets under management as a result ofincreased average assets in higher yielding Janus ex-INTECH products.

 

Performance fee revenue increased primarily as aresult of higher mutual fund fees and separate account fees driven by aseparate account reaching its one-year anniversary.

 

Shareowner servicing fees and other revenue increased$9.8 million, or 10.5%, primarily as a result of higher transfer agent feesdriven by a 7.2% growth in Janus Investment Fund average assets undermanagement.

 

***Expenses***

 

Employee compensation andbenefits increased due to a 12% growth in the average number of employees andhigher investment team compensation as a result of strong investmentperformance and higher revenue.

 

Long-term incentivecompensation decreased primarily as a result of a decline in theperformance-based acceleration of previous awards based on expected 2008financial performance, partially offset by an increase related to the 2008annual grant awarded in February.  Grantsmade during the six months ended June 30, 2008, totaled $82.8 million andwill be recognized ratably over a three-year period.

 

In addition to theseawards, retention awards were granted to certain Janus investment team membersand INTECH employees to facilitate succession planning and incentivize keypersonnel to remain with the company. The Janus retention grant totaled $21.0 million and will be recognizedratably over a four-year period.  TheINTECH retention grant totaled $10.0 million and will be recognized ratablyover a ten-year period.  These awards arenot subject to accelerated vesting.

 

Marketing and advertisingexpenses increased $6.4 million due to marketing expenses from expansionefforts in the retail intermediary and international sales channels, and higherprint advertising expenses associated with the continued promotion of the Janusbrand.

 

Distribution expenseincreased $9.4 million, or 14.4%, from a similar increase in assets undermanagement subject to third-party concessions.

 

Depreciation andamortization expenses increased $4.8 million primarily as a result of theamortization of deferred commissions from higher sales of Janus Adviser Series Cshares and the amortization of intangibles related to the March 2008acquisition of an additional 3% interest in INTECH.

 

Interest expenseincreased $16.7 million as a result of the issuance of additional debt in June 2007.

 

Net investment losses of$6.5 million for the six months ended June 30, 2008, were driven primarilyby mark-to-market adjustments on consolidated investment products, partiallyoffset by realized gains from the sale of certain seed capital investments.

 

The decrease in minorityinterest is largely the result of a decline in INTECH earnings associated withlower performance fees earned on separate accounts and lower average assetsunder management in the relevant investment products.

 

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**DISCONTINUEDOPERATIONS**

 

During the second quarter2008, Janus disposed of its Printing and Fulfillment operations.  On April 9, 2008, the digital printoperations were sold to Bowne & Co., Inc. for $14.5 million.  The offset operations were also sold in thesecond quarter 2008 for an immaterial amount. The liquidation of the remaining assets is not expected to have amaterial impact on Janus’ operating results in future periods.

 

**LIQUIDITY AND CAPITAL RESOURCES**

 

**CashFlows**

 

A summary of cashflow data from continuing operations for the six-month periods ended June 30,2008 and 2007 is as follows *(in millions)*:

 
|                                    | ** ** | **2008**     | ** ** | **2007**     | ** ** |
|-----------------------------------------|------------|--------------|------------|--------------|------------|
| Cash flows provided by (used for):      | ** ** | ** **   | ** ** | ** **   | ** ** |
| Operating activities                    |       | $ 80.7  |       | $ 110.9 |       |
| Investing activities                    |       | (69.5        | )          | (34.0        | )          |
| Financing activities                    |       | (216.2       | )          | 107.5        |       |
| Net change in cash and cash equivalents |       | (205.0       | )          | 184.4        |       |
| Balance beginning of period             |       | 480.7        |       | 507.1        |       |
| Balance end of period                   |       | $ 275.7 |       | $ 691.5 |       |

 

 

On an annual basis, Janus’cash flow from operations historically has been positive and sufficient to fundordinary operations and capital requirements. Cash provided by operating activities for the six months ended June 30,2008, decreased over the comparable prior year period as a result of changes inworking capital items, which can vary from period to period based on the timingof cash receipts and payments.

 

Cash used for investingactivities for the six months ended June 30, 2008, primarily represents$67.7 million for the purchase of an additional 3% interest in INTECH.  Cash used for investing activities for thecomparable prior year period primarily represents the acquisition of anadditional 4% interest in INTECH and $56.8 million of net proceeds from thesale and maturities of investments.

 

Cash used for financingactivities for the six months ended June 30, 2008, primarily representsstock buybacks of $217.8 million.  Cashprovided by financing activities for the comparable prior period includes$748.4 million of proceeds from the issuance of long-term debt, offset by debtrepayment of $158.1 million and stock buybacks of $491.7 million.

 

**Other Sources of Liquidity**

 

*Credit Facility*

 

Janus has a $350 millionThree-Year Competitive Advance and Revolving Credit Facility Agreement (the “CreditFacility”) with a syndicate of banks. The Credit Facility contains a number of financial covenants including aspecified financing leverage ratio and interest coverage ratio.  At June 30, 2008, Janus was incompliance with all covenants and there were no borrowings under the CreditFacility.

 

*Shelf Registration*

 

The Company has effectivea Shelf Registration Statement with the SEC, under which Janus could registerthe sale of an indeterminate amount of Janus’ common stock, preferred stock anddebt securities.

 

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**CapitalRequirements**

 

***PWM***

 

OnJuly 7, 2008, Janus agreed to purchase an additional 50% interest in PWMfor $90.0 million in cash.  Janus currently holds a 30% interest in PWM,which specializes in fundamental value-disciplined investing and is the named subadvisorof Janus’ small- and mid-cap value products.  The additional interest inPWM will facilitate the build-out of Janus’ value investment productofferings.  Pending the satisfaction of customary conditions including theapproval of the change in control of PWM by regulators and Janus’ value mutualfund shareholders, the acquisition is expected to close in the fourth quarter2008.

 

Uponclosing the transaction, PWM will grant profit interest awards designed toretain and incentivize key employees to grow the business which vest on thefifth anniversary of grant. The awards are generally entitled to a total of 5%of PWM’s annual net income and have a formula-driven terminal value based onrevenue growth and relative investment performance of products managed byPWM.  Janus can terminate any or all of the awards (i) on the fifth,seventh or each subsequent anniversary of grant by paying the relevant portionof the formula-based terminal value, or (ii) prior to the fifthanniversary of grant if the formula yields a terminal value of $40.0million.  Participants can require Janus to terminate the awards inexchange for the then-applicable formula price on the sixth anniversary ofgrant.  The profit interests are also subject to termination at premiumsor discounts to the formula at the option of Janus or the relevant employee, asapplicable, upon certain corporate or employment-related events affecting PWMor the relevant employee.  Compensationexpense for these awards will be recognized over the vesting period based onthe results of the hypothetical application of the terminal value formula atthe end of each relevant reporting period.

 

Janus also has the option toacquire any or all of the remaining 20% interest of PWM at fair value on thethird, fifth, seventh or each subsequent anniversary of closing. The minorityowners have the option to require Janus to purchase any or all of theirremaining interests on the fourth or sixth anniversary of closing at fairvalue.

 

***Money Market Funds Advisedby the Company***

 

Janus advises money marketfunds (the “Money Funds”) that attempt to provide current income and limitexposure to losses by investing in high-quality securities with short-termdurations that present minimal credit risk. Adverse events or circumstances related to individual securities or themarket in which the securities trade may cause other-than-temporary declines invalue.  In these situations, Janus mayelect to support one or more of the Money Funds to enable them to maintain anet asset value equal to one dollar through a variety of means, including butnot limited to, purchasing securities held by the Money Funds, reimbursing forany losses incurred or providing a letter of credit.  However, Janus is not contractually orlegally obligated to provide support to the Money Funds.

 

Janus’decision to provide support to the Money Funds is based on the facts andcircumstances at the time a holding in the Money Funds becomes or is expectedto become distressed.  A holding isconsidered distressed when there is significant doubt regarding the issuer’sability to pay required amounts when due, often resulting in a decline in thesecurities’ credit ratings.  If asecurity falls below the minimum rating required by investment restrictions,the Money Funds must dispose of the investment unless the Money Funds’ board oftrustees determines that such disposition is not in the best interests of theMoney Funds.  In determining whether totake any action in response to a distressed condition or a downgrade affectingsecurities held by the Money Funds, Janus considers many factors, which mayinclude the potential financial and reputational impact to the Money Funds andJanus, the regulatory and operational restrictions, the size of a holding, asecurity’s expected time to maturity and likelihood of payment at maturity,general market conditions, discussions with the Money Funds’ board of trusteesand Janus’ board of directors, and Janus’ liquidity and financialcondition.  No single factor isdeterminative and there is no predetermined threshold with respect to eachfactor that would lead Janus to consider providing support to the Money Funds.

 

*FinancialSupport Provided to the Funds*

 

On December 21,2007, Moody’s Investors Service, Inc. downgraded securities issued bycertain structured investment vehicles (“SIVs”) including those issued byStanfield Victoria Funding LLC (“Stanfield securities”) to a rating below whatis generally permitted to be held by the Money Funds.  The Money Funds held $105.0 million ofStanfield securities plus $3.5 million of accrued interest at the time of thedowngrade.  In connection with thisdowngrade, Janus determined that it was in the best interests of the applicableMoney Funds and their shareholders for Janus to purchase the Stanfieldsecurities from the Money Funds at amortized cost plus accrued interest.  Subsequent to purchase, Janus recognized an$18.2 million impairment charge in the fourth quarter 2007 (including $3.5million of purchased accrued interest), 

 

16

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reflecting thedifference between the low end of the range of estimated fair value and thepurchase price of the Stanfield securities. Included in Janus’ estimate of fair value is the assumption that nointerest income payable on the securities will be received.  Janus again assessed the fair value of theStanfield securities as of June 30, 2008, and determined that no furtherimpairment was necessary.  Janus’ totaladditional risk of loss with respect to the Stanfield securities is limited tothe $90.3 million carrying value of its investment.

 

In January 2008,the Stanfield securities were placed with an enforcement manager to berestructured or sold at the election of each senior note holder.  Janus elected to participate in therestructuring of the Stanfield securities. In addition, the collateral agent, Deutsche Bank, filed an interpleadercomplaint due to conflicting positions of note holders that has effectivelyprevented the enforcement manager from making any cash payments and otherdistributions, or from restructuring the Stanfield securities, until the matteris resolved by the New York courts or is settled among the parties.  The senior note holders are currently innegotiations to determine a new structure and resolve the interpleadercomplaint.  Janus management believesthat the anticipated restructuring will likely result in extended maturitiesand/or a pro rata distribution of proceeds from the income and principal paymentson the assets underlying the Stanfield securities.  Given the uncertainty of the restructuring atthis time, Janus can not determine the potential impact that a restructuringwill have on the value of the Stanfield securities.  Janus may recognize additional impairmentcharges on the Stanfield securities if the restructuring is unsuccessful orthere is an other-than-temporary deterioration in the value of the underlyingassets.

 

*Securities Held by the Funds*

 

Janus continuously evaluatesthe securities held by the Money Funds to determine if any holdings aredistressed or may become distressed in the near future.  Janus continues to monitor the remaining$50.0 million of securities issued by bank-sponsored SIVs held by the MoneyFunds, representing approximately 0.4% of total money market assets undermanagement at June 30, 2008. These SIV securities are scheduled to maturein August 2008.  Bank-sponsored SIVshave access to various forms of liquidity through their sponsors or other largefinancial institutions, and are therefore considered to pose less risk toholders.  Nonetheless, if the marketsrelating to investments in SIVs and related underlying assets remain illiquid,securities issued by bank-sponsored SIVs could experience declines in market value.  Additionally, sponsors could be unable orunwilling to continue their sponsorship of these SIVs, which may cause adecline in the credit quality of bank-sponsored SIVs.  In such circumstances, Janus would considerwhether taking any action, including, but not limited to, a potential electionby Janus to provide further support to the Money Funds that could result inadditional impairments and financial losses, would be appropriate.

 

***INTECH***

 

Eachfiscal year through 2012, each of the two INTECH founding members has theoption to require Janus to purchase from him an ownership interest of up toapproximately 1.5% of INTECH (“Annual Option Shares”) at fair marketvalue.  Subsequent to the March 31,2008 sale of a 3% interest in INTECH to Janus by the founders, the two foundersown an aggregate ownership interest of approximately 8% in INTECH.  In the event that either INTECH founder doesnot fully exercise his annual voluntary sale option in a given year, Janus hasthe option to require the INTECH founder to sell the remaining balance of theAnnual Option Shares for that year at fair market value.

 

Inaddition, the founders can require Janus to purchase their INTECH interestswhen the founder’s employment is terminated. The purchase price of the departing founder’s INTECH interests will bebased on fair market value.  Each founderis entitled to retain approximately one percent of INTECH’s shares thenoutstanding after employment until his death unless he is terminated for causeor leaves voluntarily while not in good standing.  An INTECH founder will be deemed to be ingood standing if he voluntarily leaves on or after January 1, 2009, afterproviding 12 months’ prior notice and cooperation with the transition.  Janus has not recorded a liability for thepurchase of the outstanding INTECH interests due to the uncertainty of thisobligation and the price at which it may occur. Total INTECH interests held by the two founders would currently bevalued at approximately $147.0 million, based on the most recent determinationof fair market value.

 

**Item3.     Quantitative and QualitativeDisclosures about Market Risk**

 

TheCompany has had no material changes in its exposure to market risks from thatpreviously reported in the Company’s Annual Report on Form 10-K for theyear ended December 31, 2007.

 

**Item 4.     Controls andProcedures**

 

Janus’management evaluated the effectiveness of the design and operation of itsdisclosure controls and procedures (as such term is defined in Rules 13a-15(e) and15d-15(e) under the Exchange Act) as of June 30, 2008.  Disclosure controls 

 

17

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andprocedures are the controls and other procedures that the Company designed toensure that it records, processes, summarizes and reports in a timely mannerthe information it must disclose in reports that it files with or submits tothe SEC.  Gary D. Black, Chief ExecutiveOfficer, and Gregory A. Frost, Executive Vice President and Chief FinancialOfficer, reviewed and participated in this evaluation.  Based on this evaluation, Messrs. Blackand Frost concluded that as of the date of their evaluation, Janus’ disclosurecontrols and procedures were effective.

 

Therehas been no change in Janus’ internal controls over financial reporting (assuch term is defined in Rules 13a-15(e) and 15d-15(e) under theExchange Act) during the three months ended June 30, 2008, that hasmaterially affected, or is reasonably likely to materially affect, Janus’internal controls over financial reporting.

 

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**PART II – OTHER INFORMATION**

 

**Item 1.     Legal Proceedings**

 

SeePart I, Item 1. Financial Statements, Note 11 – Legal Proceedings.

 

**Item 1A.     Risk Factors**

 

TheCompany has had no material changes in its risk factors from those previouslyreported in the Company’s Annual Report on Form 10-K for the year ended December 31,2007.

 

**Item 2.     Unregistered Sales ofEquity Securities and Use of Proceeds**

 

On July 22, 2008, the Board of Directors authorized a fifth $500million stock repurchase program to take effect when the current authorizationis utilized.  During the first six monthsof 2008, Janus repurchased 7.8 million shares at an aggregate cost of $209.2million under the current authorization. The Company cautions that there are no assurances that any futurerepurchases will actually occur.

 

Inaddition to this program, for the six months ended June 30, 2008, Janusrepurchased 315,127 shares from employees as a part of a share withholdingprogram (established under Rule 10b5-1 of the Securities Exchange Act of1934) to satisfy employees’ income tax liabilities attributable to the vestingof restricted stock awards.

 

| **Period** | ** ** | **(a) Total  Number of  Shares (or  Units)  Purchased** | ** ** | **(b) Average  Price Paid Per  Share (or Unit)** | ** ** | **(c) Total Number of  Shares (or Units)  Purchased as Part of  Publicly Announced Plans  or Programs** | ** ** | **(d) Maximum Number (or  Approximate Dollar Value) of  Shares (or Units) that May  Yet Be Purchased Under the  Plans or Programs (End of  Month)** | ** ** |
|------------|------------|------------------------------------------------------------------------|------------|---------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| January    |       | 2,098,252                                                              |       | $ 27.46                                                              |       | 2,096,800                                                                                                                                                      |       | $ 245 million                                                                                                                                                                                                                            |       |
| February   |       | 2,459,497                                                              |       | $ 25.57                                                              |       | 2,156,592                                                                                                                                                      |       | $ 190 million                                                                                                                                                                                                                            |       |
| March      |       | 955,693                                                                |       | $ 23.07                                                              |       | 955,693                                                                                                                                                        |       | $ 168 million                                                                                                                                                                                                                            |       |
| April      |       | 8,683                                                                  |       | $ 23.56                                                              |       | —                                                                                                                                                         |       | $ 168 million                                                                                                                                                                                                                            |       |
| May        |       | 554,600                                                                |       | $ 27.58                                                              |       | 554,600                                                                                                                                                        |       | $ 153 million                                                                                                                                                                                                                            |       |
| June       |       | 2,039,587                                                              |       | $ 29.29                                                              |       | 2,037,500                                                                                                                                                      |       | $ 93 million                                                                                                                                                                                                                             |       |
| **Total**  | ** ** | **8,116,312**                                                          | ** ** | **$ 26.83**                                                          | ** ** | **7,801,185**                                                                                                                                                  | ** ** | ** **                                                                                                                                                                                                                                    | ** ** |

 

**Item 4.     Submission of Mattersto a Vote of Security Holders**

 

The Annual Meeting of Stockholders of Janus Capital Group Inc. was heldin Denver, Colorado, on May 1, 2008. At that meeting, the stockholders considered and acted upon thefollowing proposals:

 

*Proposal 1.  The Election ofDirectors.*  By the vote reflected below, the stockholderselected the following individuals as directors for three-year terms:

 

| **Director**         | ** ** | **For**     | ** ** | **Against** | ** ** | **Abstain** | ** ** |
|----------------------|------------|-------------|------------|-------------|------------|-------------|------------|
| Paul F. Balser       |       | 140,956,514 |       | 4,855,066   |       | 1,152,021   |       |
| Gary D. Black        |       | 140,738,721 |       | 5,089,931   |       | 1,134,949   |       |
| Jeffrey J. Diermeier |       | 140,968,783 |       | 4,824,395   |       | 1,170,423   |       |
| Glenn S. Schafer     |       | 140,885,704 |       | 4,898,540   |       | 1,179,357   |       |
| Robert Skidelsky     |       | 140,754,153 |       | 5,016,919   |       | 1,192,529   |       |

 

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*Proposal 2.*  *Ratification of Independent Auditors. *The stockholders voted to ratify the appointment of Deloitte &Touche LLP as independent auditors.

 

This proposal is morefully described in the Proxy Statement relating to the Annual Meeting.  Voting was as follows:

 

| ** ** | ** ** | **For**     | ** ** | **Against** | ** ** | **Abstain** | ** ** |
|------------|------------|-------------|------------|-------------|------------|-------------|------------|
| Proposal 2 |       | 139,998,007 |       | 2,736,329   |       | 4,202,265   |       |

 

*Proposal 3.*  *Approval of the 2008 Management Incentive Compensation Plan. *The stockholders voted to approvethe 2008 Management Incentive Compensation Plan.

 

This proposal ismore fully described in the Proxy Statement relating to the AnnualMeeting.  Voting was as follows:

 

| ** ** | ** ** | **For**     | ** ** | **Against** | ** ** | **Abstain** | ** ** |
|------------|------------|-------------|------------|-------------|------------|-------------|------------|
| Proposal 3 |       | 136,829,506 |       | 8,627,067   |       | 1,507,028   |       |

 

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**Item 6.     Exhibits**

 
| 31.1   |   | Certification  of Gary D. Black, Chief Executive Officer of Registrant                                                                                                                                                       |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                         |
| 31.2   |   | Certification  of Gregory A. Frost, Executive Vice President and Chief Financial Officer of  Registrant                                                                                                                      |
|   |   |                                                                                                                                                                                                                         |
| 32.1   |   | Certification  of Gary D. Black, Chief Executive Officer of Registrant, pursuant to 18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002                                 |
|   |   |                                                                                                                                                                                                                         |
| 32.2   |   | Certification  of Gregory A. Frost, Executive Vice President and Chief Financial Officer of  Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002 |
|   |   |                                                                                                                                                                                                                         |
| 99.1   |   | Lipper  Rankings                                                                                                                                                                                                             |

 

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 
| Date:  July 24, 2008 |
|---------------------------|
|                      |
|                      |
|                      | Janus Capital Group Inc. |   |
|                      |   |   |
|                      |   |   |
|                      | /s/ Gary D. Black |   |
|                      | Gary D. Black, |   |
|                      | Chief Executive Officer |   |
|                      |   |   |
|                      |   |   |
|                      | /s/ Gregory A. Frost |   |
|                      | Gregory A. Frost, |   |
|                      | Executive Vice President and  Chief Financial Officer  (Principal Financial Officer) |   |
|                      |   |   |
|                      |   |   |
|                      | /s/ Robert W. Blakley |   |
|                      | Robert W. Blakley |   |
|                      | Vice President and Controller |   |
|                      | (Principal Accounting Officer) |   |

 

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**JANUSCAPITAL GROUP INC.**

**INDEXTO EXHIBITS**

 
| **Exhibit  No.** | ** ** | **Document**                                                                                                                                                                                                                | ** ** | **Regulation S-K  Item 601(b)  Exhibit No.** |
|------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------|
| 31.1             |       | Certification of Gary D. Black, Chief Executive Officer of Registrant                                                                                                                                                       |       | 31                                                          |
|             |       |                                                                                                                                                                                                                        |       |                                                        |
| 31.2             |       | Certification of Gregory A. Frost, Executive Vice President and Chief  Financial Officer of Registrant                                                                                                                      |       | 31                                                          |
|             |       |                                                                                                                                                                                                                        |       |                                                        |
| 32.1             |       | Certification of Gary D. Black, Chief Executive Officer of Registrant,  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002                                 |       | 32                                                          |
|             |       |                                                                                                                                                                                                                        |       |                                                        |
| 32.2             |       | Certification of Gregory A. Frost, Executive Vice President and Chief  Financial Officer of Registrant, pursuant to 18 U.S.C. Section 1350, as  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |       | 32                                                          |
|             |       |                                                                                                                                                                                                                        |       |                                                        |
| 99.1             |       | Lipper Rankings                                                                                                                                                                                                             |       | 99                                                          |

 

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